In this episode, I interview Chris Phalen about the USSIF 2020 Sustainable Responsible Impact Investing trends report.

Christopher Phalen serves as Research Manager at US SIF. He is responsible for leading research product output such as issue report, blog posts and opeds, supporting the production of the biennial Trends Report, and conceptualizing new areas of research.

US SIF: The Forum for Sustainable and Responsible Investment

US SIF is the leading voice advancing sustainable investing across all asset classes. Its mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. Their members, represent $5 trillion in assets under management or advisement, include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development organizations, non-profit associations, and asset owners.

US SIF is supported in its work by the US SIF Foundation, a 501(C)(3) organization that undertakes educational, research and programmatic activities to advance the mission of US SIF, such as offering online and live courses for different audiences, including advisors, other financial professionals and individual investors.

Their three main areas of focus are: policy, education, and research.

The 2020 trends report showed sustainable investing in the United States continues to expand at a healthy pace.

The total US-domiciled assets under management using sustainable investing strategies grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, an increase of 42 percent. This represents 33 percent, or one in three dollars, of the $51.4 trillion in total US assets under professional management.

One of the major take aways from the report is the importance of climate change and some other ESG (environmental, social, governance) criteria. There was a huge jump in sustainable natural resources and agriculture.

About $5 trillion is from retail investors and $12 trillion from institutional investors. Institutional investors are made up of: public funds, insurance companies, education, foundations, and labor.

About half of the institutional money managers did not disclose how they are using SRI strategies to manage assets. Disclosure is completely voluntary but it would be nice to have more disclosure so everyone could have a better understanding of the trends.

Public funds – in terms of amount – are the most impactful. They have the most dollars going towards engaging with companies including filing shareholder resolutions. They are the fourth most active groups.

Faith based institutions filed the most resolutions. However they don’t have nearly as much money invested as public funds.

Public funds, money managers, and labor are the largest (by dollar) institutional investors engaging in SRI strategies.

Faith based institutions are closely followed by money managers – then foundations – then public funds for the number of resolutions filed.

Money managers include: mutual funds, ETF, annuities, and other investments.

Community investment financial institutions doubled between 2014 and 2016. They doubled again between 2016 and 2018. They increased by 44% between 2018 and 2020. in the past two years. The largest part is community development credit unions followed by community development banks, community development loan funds, and community development venture capital.

The leading ESG issues by number of shareholder resolutions were:

  • corporate political activity
  • labor & equal employment opportunity
  • climate change, executive pay
  • independent board chair
  • special meetings
  • written consent
  • human rights
  • board diversity
  • proxy access

How can people get in touch with you?
Chris Phalen:
(202) 872-5346

Stay Connected with AMA Financial Advisors

Keep up with the latest from AMA Financial Advisors.

Los Angeles, Phoenix and Virtural

(480) 447-7790

(424) 358-5410

AMA Financial Advisors

Powered by ConvertKit